Wednesday, September 24, 2008

Without Consequences

I can't pretend to understand all of what is going on in the financial crisis that is threatening our nation. My math brain is limited at the best of times, and it doesn't take long, when I'm reading about high finance, before my eyes glaze and I start rereading sentences over and over in a futile attempt to understand the concepts behind the quotes and charts and numbers.

But I do know that St. Paul was the first to warn Christians that the love of money was the root of all evil. And I do know that our speculative way of making money out of nothing as Wall Street is wont to do is not always a wise or sustainable way to conduct ourselves.

The bad mortgages which appear to be at the root of this crisis show how the system may be exploited: take something which is usually a sound investment, change the rules so that the people taking the mortgages are no longer reasonably expected to be able to repay them, continue to sell the unsound mortgages as if they were the same sound investment they always were, collect an obscene amount of profit, and leave someone else holding the bag and screaming to Congress for relief. No matter what Congress does or does not do, the people who unethically and immorally exploited the weakness in our financial system and grew extremely wealthy are not the ones who will be punished. They got theirs, after all. They made the "smart" moves, financially speaking. They raked in the cash. And now that the whole system is tottering on the rotten pillars of these unsound investments masquerading as sound ones, they return to the scene with their hands outstretched, promising to fix things for good, so long as they get more money from the taxpayers and can count on legislative support from our enablers and charlatans in public office.

It could be argued that the biggest flaw in the communist system of government was that communism was always godless communism; the unjust confiscation by the government of private property was part and parcel of the way an atheistic system was going to work. But if that is (possibly) true, it may be equally true that the biggest flaw and danger in capitalism is that here in America it has become godless capitalism, or at the very least secular materialistic capitalism.

Why does that matter? Why would capitalism work among a God-fearing people, and fail to work among a people who accept no reality aside from the material universe?

I think this is true because a capitalist economy, while not a moral evil like a communist system, is nevertheless not a morally good economic system; I'm not sure given our fallen world whether there can be a truly morally good system outside of a voluntary community structure like a monastery or convent. That is, that it is possible to exploit capitalist principles cynically and unjustly, and to create wealth at the expense of the poor, or by ignoring the costs to the public, to taxpayers, to the environment etc. of one's means of making capital, and so forth. A person who believes in God and wishes to treat people justly will be a judicious capitalist, putting his money only where he can be sure his values are reflected, and refusing to invest in or fund any enterprises which are shady or which cause harm to the people, or which are exploitative by nature.

But when a person is indifferent about God, does not believe in Him, or claims belief without actually seeking to live in a manner befitting a believer, he is less likely to care about the ethical ramifications of his investing so long as his investments are growing his wealth at a rate that, however impossibly large, is satisfactory to him; moreover, he will continue to demand that same rate of return even when economic conditions no longer make that rate of return a realistic expectation, at which point he may be tempted to participate in some temporary investments which he knows may well be unsound in the long run, but which he hopes to unload at a profit long before the crash comes. For this type of person, it's a dog-eat-dog world, and his own bottom line is the only thing that counts; the total devastation of large parts of the financial industry which looms may indeed concern him somewhat in the abstract, but such abstract concerns are still centered around his own profits, and so long as he can figure out a way to keep making money once the bottom drops out of the market he will keep playing the game.

When the majority of investors are more like the second person I described than the first, when few people concern themselves with questions like "right" or "wrong," "good" or "evil" and the like, when everyone involved puts his or her own self-interest ahead of notions like just and reasonable profit or avoidance of the shady and underhanded, then you have a situation where enough people can act in an unconscionable way to pillage and plunder and walk away from the smoking ruins (or, as I said above, return in emergency gear demanding money to help rebuild). Many innocent people have been caught up in this, and don't bear the ethical responsibility, but the crisis couldn't have happened in the first place without a "me-first" mentality and a love of money so all-encompassing that love of neighbor was drowned out in the cacophony of the closing bell.

In many ways, this crisis reminds me of another crisis of morality, the crisis many refer to as that which was brought about by a "sex without consequences" mentality which underpinned the so-called sexual revolution. That crisis, too, threw aside age-old notions of honor, commitment, honesty, integrity, and morality in favor of shameless temporary physical contact with no thought whatsoever for the moral and emotional damage being done; the innocent, the children especially, suffered all the consequences their parents thought they could avoid by avoiding the old notions of marriage and family, which were not avoided at all, but only delayed.

And so it is with the financial crisis: the quick gratification of instant wealth was a siren whose song couldn't be ignored, and the allure of "wealth without consequences" became a powerful temptation to far too many people. But there are always consequences to our bad actions. It may be that the innocent will suffer more than the guilty, or that the consequences will be delayed by as much as a whole generation--yet sooner or later, the bill for sin will come due, and will cost far more than we ever gained from our sinful actions.

There is an additional problem with Communism - rather, with State Socialism - whether Godless or not. That is that it relies on central planning to allocate resources. No central agency can have enough knowledge, soon enough, properly to allocate resources far down the chain. This is why the Catholic Church favours a form of subsidiarist system - let things be done by the lowest level that can competently do them.

Regarding greed, Rusty Reno wrote a nice article on the First Things blog pointing out that the greed is not only at the Wall Street level. House owners wanting to cash in are the fundamental problem. It's a little bit like prostitution, perhaps: no johns, no whores.

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I'm Catholic. Period. Not to be confused with "I'm Catholic, but..."
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